The fruity cargo-cult Apple is not having a good week - not only has its iPhone X launch been greeted with howls of derision, now it has been sued over the advertising for its overpriced Beats headphones.

A lawsuit filed in the US District Court in Oakland, California, is based around the frustrations of five plaintiffs who found that Apple's Powerbeats 2 and Powerbeats 3 headphones did not perform as advertised.

To make matters worse, Apple is refusing to honour warranty commitments to repair or replace the failed units, presumably on the basis that would provide a customer service and would hurt Apple’s margins.

The complaint seeks $5,000,000 in damages and class action certification, in order to represent thousands of similarly afflicted Beats customers who fell for Apple’s misleading adverts.

In widespread advertising and marketing campaigns, Apple touted that its costly Powerbeats (which retail for $199.95) were 'BUILT TO ENDURE' and are the 'BEST HEADPHONES FOR WORKING OUT', the complaint moaned to the court.

"But these costly headphones are neither 'built to endure' nor 'sweat & water resistant,' and certainly do not have a battery that lasts for six or twelve hours. Instead, these shoddy headphones contain a design defect that causes the battery life to diminish and eventually stop retaining a charge", court documents said.

The complaint attributes the shoddiness of Apple's Powerbeats headphones to cheap components. The complaint said that Apple's Beats Solo headphones cost $16.89 to make and retail for $199.95: a markup of more than 1,000 percent. With that sort of mark up, you'd think Apple would replace the faulty units without thinking.

After forcing its iPhone users to dump their headphone jacks, Apple has been rubbish at supplying them with wireless phones that work.

Yesterday we revealed how Apple’s expensive Airbuds were put on the never-never after Jobs’ Mob could not get them to work. Now it seems that the the BeatsX wireless earphones also appear to be delayed indefinitely.

An email sent out from authorised Apple reseller B&H Photo Video said that Apple’s BeatsX earphones won’t even begin shipping for another two to three months if you are lucky.

“We regret to inform you that the manufacturer has informed us that they still do not know when they will begin shipping this item but they do know that it will take at least 2-3 months,” the email reads.

Originally introduced this past September alongside the iPhone 7, BeatsX earphones feature Apple’s vaunted W1 chip and can deliver an impressive eight hours of battery life on a single charge. Even more enticing is that a quick five minute charge will afford users two hours of additional playback. If they worked of course. Apple might as well have said they will deliver 24 hours of use and cure cancer, because the product is vapourware

Apple wanted to get BeatsX earphones out onto stores shelves in the autumn. What remains unclear is why Apple is having trouble getting BeatsX earphones to market as it is not much different from a conventional pair of earphones.

It might be a little tricky for the fruity tax-dodging cargo-cult to convince users to embrace its headphone jack free products while it is on track to win the Duke Nukem product award for speedy product delivery.

Fruity tax dodger Apple’s moves to replace the headphone jack on the iPhone 7 were nothing about users and everything about its Beats racket.

The Tame Apple press has been claiming that Apple has just killed off the century old tech in the same way that it killed off the “CD drive and Ethernet port on laptops” (sic).

What none of them are actually saying is that people will not experience an improvement in sound on the iPhone 7 and what they will have to do is consider buying Lightning or Bluetooth headphones.As a result, Apple will make a killing.

Lightning headphones have to go through Apple’s licensing programme and Jobs’ Mob charges a flat fee for every device sold. At the moment sales of Lightning headphones are low, so if Apple gets people to use them it makes dosh even if it does not make them.

It will also increase the sales of Bluetooth headphones and according to NPD a quarter of the Bluetooth headphone market is controlled by Beats which happens to be owned by Jobs’ Mob.

The mark up on Beats gear is cheap material marketed at a high price, for idiots who know little about sound but know a lot about brands. This makes a perfect fit for Apple, but also means that by encouraging its subsidiary it makes a lot of dosh.

To be fair, sales of Bluetooth headphones were already growing, with units up 64 percent year over year according to NPD’s US figures. But it is handy that Apple’s moves to kill the headphone jack have helped out.

Apple introduced its first ever pair of wireless headphones, called the AirPods. They sell for $159. Those who have tested them say they have the same sound quality as the $29 EarPods. Beats has announced three new sets of wireless headphones, the Solo 3 Wireless ($299.95), the Powerbeats 3 sport earbuds ($199.95), and a neck-wraparound called the Beats X ($149.95).

Apple’s decision to kill off the headphone jack was brave. It could backfire and users will ignore the iPhone 7. But the move was a smart bet. It is based on the very likely assumption that Apple users have to be stupid enough not to spot that they have no benefit from using it and that the change is just another way for Jobs’ Mob to screw them over. Apple has been lucky that so far its users have never wised up to that fact.

When Fruity Cargo Cult Apple bought Beats headphones it was not clear how much of a marriage in hell the arrangement was. While Apple was famous for its obscenely high profit margins it was a bunch of amateurs in comparison to Dr Dre.

A tear down has revealed some fairly embarrassing truths about the gear which show that not only is the market-up obscene, it is also designed to cheaply look expensive.

The analysis was put together by engineer Avery Louie, who has loads of experience helping startups figure out how to refine their designs and get their products manufactured.

He said that the most expensive thing about the headphones is the box it comes in.

A pair of Beats headphones that retails for $199 costs about $17 to produce. However it gets much worse. That price includes the packaging -- the manual, soft case, box, and sleeve which costs $7. The headphones cost less than $10 each to make. Also when you chuck out the box, you are getting rid of nearly half the phone's value.

Apparently what makes a cheap pair of headphones feel more expensive is that they are loaded with metal to add weight. This gives the illusion that the product is worth more cash than something else on the rack. In fact the metal strips only cost pennies but account for 30 per cent of the total weight.

Louie says there's no real reason they need to be made from metal. It's all about creating an illusion.

So when an Apple fanboy tells you that you "get what you pay for" you can point out that you are paying $200 for a $10 pair of headphones. If you see someone wearing a pair of beats phones you can laugh and point knowing that you are looking a fool who has been parted from his money. Still if they are plugged into an iPhone you could have guessed that already.

Apple's wheeling and dealing with the record labels is under US antitrust scrutiny as it might turn out to be a little bit illegal.

The Tame Apple Press is gearing up to over promote the outfit's Beats Music streaming service, but what you might not know is that the Federal Trade Commission (FTC) is examining the fruity cargo cult to see if it is using its position as the top seller of music downloads through its iTunes store to put rival music services like Spotify at a disadvantage.

Apple bought Beats last year hoping to win points with the music industry and turn Beats Music into a strong competitor to Spotify and other streaming services.

Jobs' Mob did well with iTunes, but found that music streaming services were more popular. Since buying Beats Apple approached more than a dozen artists in the music industry including for limited exclusive rights to music and partnerships to help bolster Beats.

The idea was to try to get the music labels to force streaming services that offered a free tier to abandon that idea.

These sorts of antics are exactly what Apple did to try and take control of the eBook market from Amazon. Amazon had kept the price of ebooks under $10 which angered the major publishers, Hachette, HarperCollins, Macmillan, Penguin, and Simon & Schuster. Apple did a secret deal with them which forced Amazon to raise the price.

Apple lost its court case on that anti-trust action, but the fact that it is trying the same stunt with music streaming means that if it loses its appeal it could find its self on the wrong end of a contempt of court hearing.

Fruity cargo cult Apple does not think that the Beats streaming service is a cool enough name and it is likely to kill off the brand.

Word on the street is that Apple plans to eliminate the Beats Music streaming service, which it acquired in May. The report is less clear on what Apple plans to do with streaming music. One source tells TechCrunch that on-demand music could be integrated into its god awful iTunes, but it is widely expected that Apple will make a "significant music announcement" in the first half of 2015. Apple's music strategy seems to be offering on-demand listening along with ad-supported radio and digital downloads.

Engineers from Beats Music have moved to other divisions at Apple, including iTunes. When Apple bought the Beats brand for $3 billion, Apple senior vice president Eddy Cue called Beats Music "the first music subscription service done right." Of course it mimicked existing services from Spotify, Rdio but Apple admire copying others ideas.

Beats Music used hand-curated playlists and the involvement of music-industry titans like Dr. Dre and Trent Reznor. Apple has actually gone to the extent of denying that it will kill off Beats. Apple plans to continue to offer on-demand streaming but may "modify" the Beats Music brand over time, suggesting it may fold the service into iTunes.

There is no doubt that the time of iTunes and people buying CDs or downloading whole albums is on its way out, slowly but surely.

Many of our older readers might remember vinyl records that were hard to copy and hard to manage. Compact cassettes were a godsend for pirates and mixtape lovers. The final transition to digital audio started in the eighties, with 44KHz Compact Discs. Napster showed the world that there was money to be made in downloading music content and a few years after the government shut it down, because Napster was all about sharing content illegally. Apple took the download idea and came up with iTunes, which quickly turned into a cash cow.

Apple’s iPod was the most popular audio player platform for years and it contributed to the popularity of iTunes and brought music downloads to mainstream users. It took for Apple to get any serious competition in the field. Microsoft did try its luck with Zune and needless to say, it didn’t really change anything.

Spotify is the Netfix of music

Then came Spotify, a music streaming business from Sweden that changed everything all over again. The business model is rather simple. Spotify is to music what Netflix is to for movies and TV shows. You pay a 9.99 USD / EUR / GBP and you can listen to all of the available 20 million songs on any device you happen to own. It is a seamless, cross-platform experience. Back in September 2010 the company had 10 million registered users and about 2.5 million of them where paying to get full access to all content.

In May 2014 this figure grew to 10 million paid subscribers and 40 million overall subscribers. The service is available in 56 countries including all major markets, such as the US and Germany, two gigantic markets. It is currently the most widely available music streaming service the money can buy. The free version lets you listen to the music from your notebook, tablet or desktop and even chose the songs you want, but Spotify will play an occasional commercial here and there.

Free service on a mobile phone means you can play something from the album or playlist you create, but you cannot select an individual song to play. You need to have a premium account for choosing and playing that song, at the max 320Kbps sound quality. There is an option to pay 4.99 USD / EUR / GBP and have ad free unlimited streaming on your desktop, but not on your mobile.

Keep it in the family plan

Still Spotify lacks something that Beats by Apple has and that is a good family plan. Rdio, another competing service also wants 9.99 USD / EUR / GBP for unlimited streaming of 25 million songs but it offers a family plan.

Rdio gives you 20 percent of the second family member and 50 percent of the third family member, which gives you a reasonable discount. Google Music doesn’t offer any family plans it simply wants 9.99 USD / EUR / GBP and is available in 21 countries. iMore has a nice list of all services and features compared, excluding the family plan option.

Now Beats Music has entered this already crowded market, but it has a partnership with AT&T, something that can help it make a difference in the US. Beats costs 9.99 USD for one person with up to three devices which is not too bad. The key strength, what Apple might want, is that trough the AT&T partnership Beats could offer a competitive family plan. A whole family of five with up to 10 devices combined costs only $14.99 a month.

Compared to Spotify, where five people pay $49.95, Rdio charges $32.99 for 5 people while Beats wants $14.99. This might be the key missing component that Apple was looking for. Apple is not happy about the Beats music leak and it is even questioning the deal, but we believe that Apple has passed the point where it can simply walk away from the deal.

Beats + AT&T + iTunes = Potential

AT&T is the special ingredient of the Apple and Beats deal. This wireless and TV provider has 116 million wireless customers, 17 million connected devices in services 16.5 million broadband connection users as well as 3 million small businesses. Apple can reach all these customers adding Beats to its services and serve this to its existing 800 million iTunes accounts. There is no doubt that streaming and subscription based services are the key to music and video distribution in today’s connected world, the only question is who will prevail.

There is a lot of potential with Beats, iTunes and AT&T in the mix, so $3.2 billion doesn’t sound that much knowing that Spotify would probably cost significantly more as Facebook paid 19 billion for Whatsapp, service that cannot make as much money as Spotify, at least not in the short run.

Just like Google Music, Xbox Music has failed to take down Spotify, it will be a hard task for Apple and Beats, but you cannot blame the company for trying.

Now that Dr Dre has converted to the Apple Cargo cult, we were expected to see a change in his lyrics. Sure enough one of our deep throats has got his paws on one of his latest popular beat combo lyrics which should be headed into his up coming album “Buy Apple, homies or I will fuck you up.”

Sell Out

Y'all know me, still the same O.G. but I been low-keyHated on by most these Androids with no cheese, no deals and 3G'sNo wheels and no keys, no maps, no rounded rectangles, and no SirisMad at me cause I can finally afford to provide my family with iPadsGot a crib with a wifi and it's all full of fadsTo add to the wall of Apple TVsHanging up in the office in back of my house like trophiesDid y'all think I'm a let my dough freeze, ho pleaseI am gonna bow down on both kneesMake a prayer to the maker of screen freeze I might have brought you the oldiesEazy-E's, Ice Cubes, and D.O.C'sThe Snoop D-O-double-G'sAnd the group that said motha fuck the policeGave you a tape full of dope beatsTo bump when you stroll through in your hoodAnd when iPad sales wasn't doing too goodI’m the Doctor they went to seeY'all better listen up closelyAll you niggas that said that I turned popOr The Firm floppedY'all are seeing that Dre has sold out worseSo fuck y'all, all of y'allIf y'all don't like me, blow meY'all are gonna you ain’t never going to turn me back to the old meCause I am more in love with the money.Than I am with being funny

A few days it was reported that Beats Audio will be picked up by Apple for $3.2 billion. If the deal materialises, this will be Apple’s single biggest acquisition ever. This transaction actually sounds pretty small compared to the $19 billion Facebook paid for WhatsApp, but then again Beats actually has some hardware that might be appealing to Apple computers.

Beats tried to work with HTC and this partnership didn’t really boost the company’s market share. The deal was criticised and eventually HTC pulled out. Beats Audio on HTC phones was nothing more than an overpriced graphic equaliser. This is why it didn’t pick up, as it didn’t matter to anyone who has any background in music. Beats is for hipsters rather than audiophiles and these chaps and ladies like to wear trendy things.

Apple never pinned its hopes on acquisitions

During the Jobs era Apple didn’t like acquisitions and it focused its efforts on in-house development. Of course this happened after Apple acquired Steve Jobs’ Next. In the years following Jobs’ return the company developed the iPod, iPhone, iPad, MacBook Air, A5, A6 and A7 SoC processors and many other great things. It developed iTunes, probably the single most hated piece of software on the planet, but its sales platform as well as the Apple app store helped the company make billions.

Apple’s iPhone is losing some of its mojo after six years on the market. The competition is catching up fast and the brand needs some kind of boost. The cheap headphones that the Apple ships with iPhones are not enough to make people excited anymore. Companies like Vero Moda are making $100 in-ear headphones and Beats made a big impact on the hipster community, making wearing oversized headphones in public transportation cool again. Well, maybe not cool, but socially acceptable.

What Beats has and Apple wants is the on-ear branding, as youngsters are keen to act as billboards with these headphones, offering free advertising for the company. The Beats logo with a dominant B embossed on huge headphones will be replaced by Apple, and who knows maybe even a LED display at some point.

Making sense of it all

Apple has more cash than it knows what to do with, and if you are sitting on 160 billion dollars, some silly acquisitions that might work don’t sound like a bad move after all.

People are guessing that the Beats streaming feature is what Apple is after, but with 200.000 users its hardly enough to compete with Spotify's ten million users. The only thing that makes sense is that apple is buying the cool effect. Just like Apple, Beats is known for overcharging, too.

This is something Apple really likes. Dr Dre is pricing Beats headphones for $199.95 but in reality the company is gouging its fans, simple as it can. People are buying them and with that in mind why would anyone drop the retail price?

Apple is developing its wearables and there is a good chance Google will be the first to market, with Apple entering the market months after the first wearables started shipping. As Beats managed to sell average headphones for $200, Apple managed to sell its products for at least 30 more than the competition, which is a substantial premium given the fact that the competition is making so much headway. We strongly believe that there is an enormous pool of Apple fanatics that will pick up whatever Apple cooks up, including overpriced headphones that simply don’t impress proper audiophiles.

The Carlyle Group is planning to invest $500 million in Beats Electronics, which would give the dull private-equity firm a minority stake in Dr Dre’s pet project, reports the Wall Street Journal.

It is interesting to note that it is still unclear how much Carlyle would own, but since it is paying $500 for a minority stake, it seems they value Beats at over $1 billion, which might not go down well with HTC.

Just before it tanked, HTC bought a 50-percent stake in Beats, which it eventually sold back to the headphone. The deal wasn’t welcomed by HTC shareholders who reckoned the money could have been used elsewhere and in the end the naysayers were right. Ironically, Beats is now doing a lot better than HTC. Last year its revenue hit $1 billion, up from $200 million in 2010.

But what on earth does Carlyle want with Beats? Carlyle is not new to tech, it has already made sizable investments in Freescale Semiconductor, Booz Allen Hamilton, Getty Images and Nielsen. Carlyle knows a good opportunity when it sees one and it can afford throw more cash at Beats to keep it growing.

Consumer electronics are still doing fine and the mobile craze means there are a lot more people looking for aftermarket headphones for their smartphones and tablets.